Is China the next Dubai?

I realise this is a slightly odd question to ask if only because the two countries are so different, but it is a fascinating one nevertheless and the subject of a recent event run by London-based organisation London Junto.

The debate featured Eclectica’s Hugh Hendry suggesting China was not all it was cracked up to be – no country as big and important as China could carry on running up such huge trade imbalances alongside a fixed foreign exchange regime without horrendous consequences, consequences that included the constant stoking of asset bubble fire . His opponent, Andrew KP Leung – a consultant and former diplomat – accepted China had its faults but contended it was not built on sand, like Dubai. Leung suggested profound changes were under way in China, not least involving the estimated one billion ci...